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Benefit cuts is on its way

33Bangla Mirror Desk :

Families with two children could lose up to £1,690 if the Government implements deep cuts to tax credits in its drive to slash spending on welfare by £12bn a year, ministers have been warned.
David Cameron began preparing the ground for deep cuts as he called for an end to the “merry-go-round” of the low-paid handing tax to the Treasury only to get it back in welfare payments.
The Prime Minister said the Government was determined to deal with “the symptoms of the problem”, which he defined as “topping up low pay” rather than “helping to create well-paid jobs in the first place”.
Chancellor George Osborne will start fleshing out proposals to cut welfare spending in next month’s Budget, with the plans due to be finalised in the autumn.
Mr Cameron’s comments signalled that the tax credit system, set up by Gordon Brown when he was Chancellor, is the prime candidate for heavy savings, along with the housing benefit bill.
One option being considered is returning child tax credits to the levels of 2003-04, which would save the Treasury about £5bn.
The Resolution Foundation think tank calculated that two-thirds of that move would be borne by the poorest 30 per cent of households, with families with two children losing as much as £1,690 annually. It added that almost none of the cut will fall on the best-off 40 per cent of households.
Matthew Whittaker, its chief economist, said: “Any welcome efforts to boost pay – such as raising the minimum wage and encouraging take-up of the living wage – could be undermined by reducing child tax credits and focusing tax cuts on better-off households.
“It will take heroic pay rises to offset the losses caused by severe cuts to tax credits. Such a move will leave millions of low-income working families significantly worse off, and prolong the squeeze on living standards that has only just started to abate.”
Iain Duncan Smith, the Work and Pensions Secretary, told MPs that employers had to do more to make sure staff were paid a “reasonable and decent salary”. He said: “Better salaries means less tax credits from us.”
He also accused the last Labour government of buying votes with large pre-election increases in tax credits.
Speaking ahead of figures this week on child poverty levels in Britain, campaigners warned the Government’s plans would push more families into penury. Alison Garnham, the chief executive of the Child Poverty Action Group, said: “No serious plan for the low-paid begins with making them poorer by cutting their tax credits. You can’t have one nation if children’s lives, opportunities and life chances at every turn are shaped and limited by poverty.”
The TUC’s General Secretary, Frances O’Grady, said: “Tax credits play a vital role in making sure working families are better off in work. Cutting this crucial benefit will consign millions of hard-working families and their children to living on the poverty line.”
Chris Leslie, the shadow Chancellor, said: “The Prime Minister still hasn’t come clean and said exactly what cuts he is proposing. The Government has a clear choice – will they tackle low pay or will they hit the low paid?”